Thursday, June 24, 2010

London openCity sources predict FTSE 100 will open up 33 points from yesterday's close of 5,204.Stocks to watchBG Groupconfirmed the "success" of a new well known as Tupi on block BM-S-11 in the Santos Basin pre-salt, offshore Brazil. “The information obtained from this well and other wells already drilled, reinforces the estimate of a potential 5 to 8 billion barrels of recoverable light oil and natural gas from the Tupi pre-salt reservoirs,” said the group.British American Tobacco has announced that its chief operating officer Nicandro Durante will become chief executive of the maker of Lucky Strike cigarettes in February, when Paul Adams steps down from the role. The Brazilian-Italian will become chief executive designate on September 1 and will be succeeded in his current role by John Day.DSG Internationalreported a slightly better than expected full-year profit and said it expects profitability to continue to improve in the coming year. The Currys and PC World owner’s underlying pre-tax profit rose to Ł90.5m in the 52 weeks ended 1 May from Ł56.1m last time. Societe Generale was looking for a pre-tax profit of Ł85m, in the middle of the Ł80m to Ł90m consensus range.In the PressOil was gushing largely unchecked fromBP’sstricken Gulf of Mexico well on Wednesday night – after an accident dramatically increased the flow, reports the Telegraph.Problems involving a subsea robot force the oil company to remove a containment cap, sending a further 27,000 barrels of oil into the Gulf of Mexico, as Bob Dudley takes over handling of the US crisis from Tony Hayward amid fears market may have been misled over the initial size of the spill, adds the Times.Vince Cable, business secretary, is to announce on Thursday that he has commissioned Richard Hooper, author of a seminal report on the future of thepostal service, to update his findings and help shape the coalition’s ambitious privatisation plan for Royal Mail, says the FT.The transport secretary is pushing to amend contentious European passenger rights rules that the government says are “disproportionate and very burdensome” forairlines, says the FT.Newspaper tipsTheo Fennellis on 16.2 times Seymour Pierce's forecast earnings for 2011. That falls – yes, falls – to 11.3 times on the numbers for the year after. These metrics leave Theo Fennell undervalued compared with similar luxury goods makers, so buy, says the Independent.The broader appeal is thatSVG’sholdings are not showing signs of improvement (Maxeda, the Dutch retailer, and Seat Pagine Gialle, the Italian directories publisher) and the gearing of its shares to economic recovery. At 140p, a 37 per cent discount to NAV is an attractive point of entry for long-term investors. Buy, says the Times.Lenders likeInternational Personal Financehave had it tough over the past year or two, especially because the wholesale lending markets have contracted. But the Independent says it is encouraged by the company's latest update, and with a yield of 3.4 per cent and the stock on an immodest 2010 price-earnings ratio of 8.4 times, it would be willing to snap up some of the shares. Buy.US closeUS stocks rallied near the close as the US Federal Reserve again held its Fed Funds rate at near zero.The central bank said that the "economic recovery is proceeding," but economists said the tone was more cautious than the last meeting. The Fed added "financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad."Dow Jones closed up 4 points at 10,298. Nasdaq shed 7 at 2,254 while the S&P 500 gave up 3 at 1,092.Shares fell earlier on as a poor figure for existing home sales followed a record fall in new home sales yesterday.New home sales dropped 32.7% in May to 300,000 annual rate, the lowest level since records began. Economists were looking for a drop in the seasonally adjusted annual rate to 430,000 units in May from 504,000 the month before.Lower oil futures have hit the share prices of oil companies, includingChevron,which was the second worst performer in the Dow.